Plurality in Auditing: Audit Culture Across the World

An estimated amount of $4.5 trillion are lost annually to fraud. Whistleblowing is a frequent source of information to uncover wrongdoing and discipline organizations. Yet, despite the European Union’s recent adoption of a directive to foster whistleblowing, an important control agent is largely unexplored in the accounting and management literature: The external auditor as whistleblower. This is particularly relevant in the European context, as prior whistleblowing research indicates differences between cultures. Thus, the directive, which will inadvertently also apply to auditors, may have different impacts across member-states.
Our aim is to understand auditor whistleblowing processes within their cultural, institutional, and organizational embeddedness, providing a European perspective on auditor whistleblowing. We survey auditors in all 27 member-states and develop a moderation-mediation model of auditor whistleblowing. This quantitative perspective is enriched by qualitative semi-structured interviews in select countries.
We contribute by highlighting differences and similarities across Europe and on the interplay between cultural, corporate, and personal norms as well as the professional norms associated with auditing. Our findings will help to design effective systems in audit firms and audit-related directives and regulations. More broadly, we contribute to an understanding of how control mechanisms within the European Union may need specific tailoring.